Intel expects its plans to build new chip plants will “benefit from investments from governments" that understand that a "healthy semiconductor industry is vital to their economic well-being and national security,” said CEO Pat Gelsinger on a Q3 call Thursday. With bipartisan support, “we’re hopeful the Chips Act will be passed by the end of this year, allowing us to accelerate decisions for our next U.S. site,” he said. This will “enable a more level playing field with our competitors who enjoy significant support from their governments,” said Gelsinger. “We've also seen considerable interest in the EU with the European Chips Act, and the process to select our next site in Europe is proceeding rapidly. Intel remains the only global company committed to building a leading-edge foundry in the U.S. and Europe for customers around the world.” Demand for semiconductors remains strong, and Intel factories performed “exceptionally well” in Q3, despite “a highly dynamic environment,” said Gelsinger. “Overall industry supply remained very constrained.” The “digitization of everything” is driving “the sustained need for more semiconductors, and the market is expected to double to $1 trillion by 2030,” said Gelsinger. The company forecasts 51% to 53% in gross profit margins over the next two to three years “before moving upward,” said Chief Financial Officer George Davis, vs. 57% expected this year. The stock closed 11.7% lower Friday at $49.46.

Government subsidies have nurtured tech growth, a Semiconductor Industry Association webinar heard Thursday. Speakers agreed lack of high-skilled U.S. talent tamps down growth, even if Congress ultimately funds the Chips Act (HR-1390). MediaTek USA “is in a race to hire” to boost U.S. semiconductor growth, but the “talent pool we have to draw from is not as big and as large as we’d like,” said James Chen, associate vice president-product marketing. Chips are “pervasive in everything you do,” said Mike Hogan, GlobalFoundries senior vice president-general manager, automotive, industrial and multi-market. They are “really the new oil in the economy,” he said. The U.S. industry is “investing a lot” in R&D, and funding the Chips Act “is not a handout," he said: “This is reinforcing an industry that was born in the U.S., that can become prominent and world-leading in the U.S. again.” Hogan arrived at Texas Instruments around when Morris Chang left to start Taiwan Semiconductor Manufacturing Co. in 1985, he said. TSMC is now the world’s largest chip foundry, but Chang wouldn’t have “gotten it off the ground” had the Taiwanese government “not sponsored that initiative,” Hogan said. Public policy “plays a really critical role” in nurturing growth in the U.S. semiconductor industry, said Susie Armstrong, Qualcomm senior vice president-engineering. “It’s not the case that you have a bunch of rich U.S. or Taiwanese companies” looking for congressional handouts, she said: Qualcomm typifies most U.S. chip companies that rechannel a quarter-plus revenue and profit into R&D.

The Bureau of Industry and Security will issue new export controls on certain cybersecurity items and create a new license exception for those exports, said an interim final rule Wednesday. It will establish more restrictions on items that can be used for “malicious cyber activities” by imposing a license requirement for shipments to certain countries, said BIS, part of the Commerce Department. The changes, effective Jan. 19, will align U.S. cybersecurity restrictions with controls previously agreed to at the multilateral Wassenaar Arrangement. BIS seeks comment on the changes by Dec. 6, says Thursday's Federal Register.

Rethink proposed rules for secure telecom gear in U.S. networks (see 2106180039), Huawei said in reply comments posted Tuesday in docket 21-232. “While Huawei shares the Commission’s stated interest in ensuring secure and reliable communications networks, the record demonstrates that the proposed rules would be an unlawful and irrational way to address purposed risks associated with RF equipment,” the company said: “Proposed rules are fundamentally flawed in seeking to preclude and revoke RF equipment authorizations of selected companies without considering whether the equipment poses any interference or security risk.” The rules are also “overly burdensome and costly, would be ineffective at best, and violate obligations of World Trade Organization members and fundamental principles of the General Agreement on Tariffs and Trade,” Huawei said.

The Bureau of Industry and Security plans a virtual forum 9 a.m. EDT Oct. 29 to gather recommendations on bolstering the resiliency of “critical supply chains” for the U.S. information and communications technology industry “that are at risk of disruption, strain, compromise, or elimination,” says Tuesday’s Federal Register. Requests to give oral statements at the forum are due Friday. Submissions to listen in are due Oct. 27. Information collected at the forum will help the Commerce and Homeland Security departments prepare their report to the White House by the one-year anniversary of President Joe Biden’s Feb. 24 executive order on curing ICT supply chain disruptions. BIS also seeks comment by Nov. 4 on building more resiliency into ICT supply chains (see 2109170042).

Global smartphone shipments dropped 6% in Q3 as vendors struggled to meet demand amid a “chipset famine,” Canalys reported Friday. The smartphone industry is straining to maximize device production, while chipmakers bump prices to “disincentivize over-ordering," in an attempt to close the gap between demand and supply, said analyst Ben Stanton, saying shortages won’t ease until “well into 2022.” High global freight costs hiked device pricing at retail, Stanton said. Verizon dropped its $1,000 iPhone offer Thursday, scaling it back to a maximum $500 off, and AT&T’s website Friday showed the $1,000 deal expiring Oct. 14. New Street Research's Jonathan Chaplin wrote that the end of the $1,000 offers put the brakes on a “wireless industry selloff” around subsidies offered with the iPhone 13 launch. The moves may improve T-Mobile’s ability to take share in Q4, said the analyst: The carrier was offering up to $1,000 “on us” Friday via 30 monthly bill credits for customers choosing the Magenta Max plan and trading in an eligible device.

EU governments generally back the European Commission's proposed AI act, said EU Council telecom officials Thursday after a virtual debate on the legislation. Everyone agreed there must be a systematic, unified approach to AI in the single market based on fundamental rights, said Bostjan Koritnik, public administration minister for Slovenia, which holds the current EU presidency. Officials want a horizontal regulatory framework that covers use of AI in all sectors. The vast majority of ministers support the EC's risk-based approach but said many issues need further discussion, such as the scope of the measure, law enforcement aspects and definitions of key terms, the Council said. The debate raised two key questions, said EC Internal Market Commissioner Thierry Breton: The need for a unified approach that generates trust and the necessity of balancing innovation against citizens' confidence in using AI. EU rules will also have to apply to AI producers outside the EU, he said. Rules must be proportionate, limited to what's necessary, adaptable to emerging risks and respectful of values, and must stimulate investment, he said. Governments must ensure access to the data on which AI depends, Breton added. Discussions will continue in the Council's telecom working party, with a compromise proposal expected in November.

The Commerce Department's Bureau of Industry and Security fined a U.S.-based telecom company $1.87 million for illegally exporting goods to Vietnam, BIS said in a Tuesday order. California-based VTA Telecom, a subsidiary of a Vietnamese state-owned telecom company, allegedly included false statements in its export applications to conceal defense end uses for the exports, BIS said. It said it will suspend about $200,000 of the penalty if VTA completes a two-year probationary period outlined in a settlement agreement with BIS, or if it dissolves its business. VTA agreed to spend $25,000 to improve its “ongoing” export compliance efforts and hire a trade compliance director for two years. If VTA doesn’t pay the fine or violates the agreement, BIS may deny the company export privileges. VTA Telecom couldn’t be reached for comment.

The “sophistication and safety” of Huawei’s 5G products “have been recognized by most operators around the globe,” said a Chinese Foreign Affairs Ministry spokesperson Tuesday when asked about a Nanos Research poll for the Globe and Mail that found 76% of Canadians support banning Huawei from participating in Canada’s 5G network buildout, following the lead of the U.S. and Australia. A similar Nanos poll in 2019 found 53% supporting a Huawei ban. Prime Minister Justin Trudeau hasn’t ruled out including Huawei in Canada’s 5G buildout and is expected to announce his decision soon. “The Canadian side should adopt an objective and unbiased attitude, independently make decisions that are in line with its interests, and provide a fair, just, open and non-discriminatory business environment for Chinese companies,” said the spokesperson.

A European Parliament vote opposing mass AI surveillance by police got cheers from civil society, jeers from the tech sector. Wednesday's nonbinding resolution backed a ban on private facial recognition databases, behavioral predictive policing and citizen scoring, and said automated recognition shouldn't be used in public places. Lawmakers worried AI surveillance could discriminate against various groups, especially in the context of law enforcement and courts, and said citizens should be monitored only when suspected of a crime. They said humans should supervise AI systems, algorithms should be open, and people subject to AI surveillance must have remedies. The report took "what many have seen as the most progressive steps of the Parliament so far in the AI debates -- and perhaps some of the most progressive in global AI policy," blogged European Digital Rights Wednesday. The Information Technology and Innovation Foundation, however, warned the ban on facial recognition would "undermine efforts to effectively respond to crime and terrorism in Europe." It urged the EU to focus on developing safeguards for appropriate use of the technology and effective enforcement of privacy laws.